Fuel Prices, Good For Consumers, Bad For America

16 January 2015
 Categories: , Blog


For the first time in a very long time, consumers can go to the fuel pump and not grimace. In some instances, a gallon of gasoline is less than two dollars a gallon, that is cheaper than a gallon of milk. Needless to say, consumers have something to cheer about right now. However, there could possibly be a very negative consequence in the near future. Low gas prices could be an indicator of a future stock slump, and that would erase any benefit of the low fuel price.

Saudi Arabia and the United States 

The country of Saudi Arabia has more recoverable barrels of oil than the United States can even dream about. That is not to say that the United States does not have a very healthy amount of recoverable oil, because it does, but Saudi Arabia has much more. In order to produce a barrel of oil in Saudi Arabia it costs nearly thirty five cents. This is mainly due to the fact that there is no need to pump the oil out of the ground. In the United States, it costs nearly thirty five dollars just to produce one barrel of oil. It is easy to see why Saudi Arabia can open the "faucets" and sell oil. They can turn a profit when the United States simply cannot. 


Right now, oil prices are nearly fifty dollars a barrel. So, it is not worth drilling for American oil. If the United States is not drilling for oil and gas, we lose thousands of jobs, and ultimately many smaller oil companies will have to pull the plug and eventually go under. Remember that oil companies play a major role in the stock market, and many brokers figure the petroleum industry to be a significant sign of how the economy is doing. Right now the economy is bad, but it could get much worse. 

Savor the Savings but be Smart

Try and remember when the last time gas was this cheap. In the year 2008 gas became extremely cheap, and as one can imagine, consumers rejoiced. Do not forget what happened very shortly after gas prices dropped. The economy went into a recession and things became very rough around the United States. Right now enjoy the low gas prices, from places like Small & Sons Oil Dist Co, but realize that it comes with a tremendous cost. Do not be surprised when we see the economy go into a very big slump. Enjoy the savings right now, but pray that gas prices go back up in the near future.